News & Views - Savantor

NFC support is falling short

Monday, 21 April 2008

The question of whether NFC will replace contactless cards is addressed in a report from Ireland-based Research and Markets, which says NFC has yet to take off because of the lack of phones that can handle the new technology plus lack of incentives for carriers or banks to get involved. While NFC has attracted the attention of the largest telcos, transport companies, banks and others and new trials are frequently announced all over the world, it has yet to take off, because the telcos have failed to seek, according to the company release about the report, "a mutuality of benefit with others in the value chain. That has meant that very few NFC enabled phones have been made available, banks are cautious about letting their cards be mimicked by the phones and transport operators are cautious about the ticketing option being loaded."
These views were echoed at the recent Digital Money Forum where a panel representing various players thought that

  • banks do not yet understand where the revenue will come from
  • mobile payments needs to solve a problem for consumers to be successful.  At the moment it is a solution looking for a problem.
  • NFC business case is difficult for operators as they have to pay for phone renewals.  Therefore handset replacement will not be accelerated for NFC – it will be on normal replacement timescales.
  • Banks are unlikely to share the revenue with operators.  Therefore for NFC to be successful a new payments model is needed which benefits all players. 

So it may be a while yet before we see this advancing beyond the O2 trial in the UK.

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